New York Times columnist Tim Egan has written a piece that should be read – no, memorized – by every city councilor and other public official in Bend.
Egan looks at Northern California’s San Joaquin Valley – a region he calls “Slumburbia” – and paints an ugly picture of the economic and human debris left behind by the receding tide of the real estate boom. Except for the part about gang graffiti, which we haven’t seen much of here yet, it could easily be a description of Bend, Oregon:
“Dirty flags advertise rock-bottom discounts on empty starter mansions. On the ground, foreclosure signs are tagged with gang graffiti. Empty lots are untended, cratered with mud puddles from the winter storms …
“Take a pulse: How can a community possibly be healthy when one in eight houses are in some stage of foreclosure? How can a town attract new people when the crime rate has spiked well above the national average? How can a family dream, or even save, when unemployment hovers around 16 percent?”
Why did local officials in the San Joaquin Valley allow the insane over-building that led to the collapse happen? For much the same reason that their counterparts here did: It seemed like an easy way to increase revenue without raising taxes.
The cities of the valley “encouraged the boom, spurred by the state’s broken tax system. Hemmed in by property tax limitations, cities were compelled to increase revenue by the easiest route: expanding urban boundaries. They let developers plow up walnut groves and vineyards and places that were supposed to be strawberry fields forever to pay for services demanded by new school parents and park users.”
Adopting that strategy, though, quickly puts cities on an ever-accelerating treadmill: The new development they bring in to raise revenue generates demand for more city services and facilities, which requires more revenue, which compels them to encourage still more development.
Egan notes that cities that resisted the temptation to sprawl their way to prosperity – places like San Francisco, Seattle and Portland – didn’t get hammered nearly as hard when the real estate bubble burst.
“All of these cities have fairly strict development codes, trying to hem in their excess sprawl. Developers, many of them, hate these restrictions. They said the coastal cities would eventually price the middle class out, and start to empty.
“It hasn’t happened. Just the opposite. The developers’ favorite role models, the laissez faire free-for-alls — Las Vegas, the Phoenix metro area, South Florida, this valley — are the most troubled, the suburban slums.
“Come see: this is what happens when money and market, alone, guide the way we live.”
The people who run Bend have seen – but, as they fight to ram through a huge expansion of the city’s Urban Growth Boundary, hoping the same failed grow-grow-grow strategy that got us into the current mess will get us out of it, it’s obvious they haven’t learned a damn thing.
This article appears in Feb 11-17, 2010.
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O bruce you forgot to mention, 90% of our country is probably in the same shape? so just what are you getting at? that most all of the people running are government don’t know what they are doing. so that makes me wonder, why should we give them more money, if they don’t know how to run things with what they gget??
I don’t get you Miller. You voted YES on 66 and 67, and with great snobery. Now you whine about the boundary. Bigger taxes, bigger boundaries. These two issues are not opposed on the sliding scale. They both eventually get to the same place and occupy the same space. Bubbles. That eventually pop. Gads.
hey bruce i just read a story, some one in our state government just found 200 and some million some were in a treasure chest, and now they are on budget, sounds kinda funny it was found after vote on 66 and 67 passed??? and no we are gunna be ok.
What really is a comfort to me and true american patriots is that the fabian socialist movement is a minorty. true in deschutes county as well . What is job creation in the private sector to you Mr. miller and can your socialistic government job creation compete? And can you provide the stats to prove socialism is better than capitalism? And is Russia a good example?
Here’s a piece of the story Bruce didn’t mention:
“Second, look at the cities with stable and recovering home markets. On this coast, San Francisco, Portland, Seattle and San Diego come to mind. All of these cities have fairly strict development codes, trying to hem in their excess sprawl.”
Bend’s UGB hasn’t expanded in ages (except for an annexation). The same land use system that applies to Portland applies to Bend, keeping genuine sprawl from happening. But to some, all growth is sprawl.
The San Joaquin Valley/Bend comparison is a huge and flawed stretch. Can you imagine the response if Bend (assuming it could) blocked new housing despite massive demand that was driving up costs?
At least here the land-use system works well enough for the state to call B.S. on the city’s plans. Ultimately Bend will probably get away with Beaverton-like sprawl, but at least it won’t be easy.
What the land-use system CANNOT do is rein in the speculators who bought half-million-dollar shacks as second homes; the way to rein in those financial vandals is to allow banks holding the loans on their “investments” to put a lien on the first home when the vandals try to walk away.
“Can you imagine the response if Bend (assuming it could) blocked new housing despite massive demand that was driving up costs?”
I don’t think we’re going to have to worry about “massive demand driving up costs” here for many years — if ever.
It wasn’t really “massive demand” that drove up home prices in Bend during the bubble either — it was a massive speculative frenzy.
“O bruce you forgot to mention, 90% of our country is probably in the same shape?”
Uh, no, it isn’t in the same shape. Not even close. Central Oregon, especially Bend, has seen a much sharper drop in home prices than the great majority of other markets. And Deschutes County’s unemployment rate of 16.4% (as of December) is as bad as the 16% Egan cites for the San Joaquin Valley.
Apparently some still have yet to wake up to the reality surrounding them. In their worlds denial must make it so. But, if it makes their lives seem a little more rose-colored, let ’em enjoy their delusional view of Bend.
wow this was taken down quick. bummer. no comparison, don’t see dirty flags or people spraying paint every were, boy this is way off, try again Bruce!!!!
There you go again, Bruce. You compare Bend, where there is land beyond its corporation limit in which to expand, to Portland, Seattle, and San Francisco that have limited expansion alternatives. These places have cities/suburbs with their own boundaries touching every border coupled with limited availability of land within their borders. Why not throw in NYC to the comparison. It hasn’t had a huge correction either.
But it is a different story if you compare Bend to Portland’s Happy Valley or Portland’s Damascus or Portland’s Wilsonville. The point is that where large cities can not expand due to borders and limited space within the border, huge price fluctuations are not as likely….it is only common sense. Given available space these havens, Portland, Seattle, and SFO would be in the same place as Vegas and Phoenix. Be mindful that in these unaffected havens, limited supply also drives up prices. But that gets us into capitalism, a strange and vulgar concept to you.
We could/should also throw in Washington, DC that hasn’t had a significant price correction. Oh but then that is because our tax dollars are paying for this stimulus pork that only increases government union jobs….same for Salem.
Nice try Bruce. But the real causes of the real estate bubble and the housing over supply were greed, artificially low interest rates, and the corruption at Fannie and Freddie Mac. Your old pal Bubba saw to it that in his administration, 45% of the loans purchased by Fan and Fred were from otherwise uncreditworthy people. W tried to stop it in 2003/2004 with tighter regulation of those places but your other pals, Barney Frank and Chris Dodd, quashed any reform at those two institutions.
“But the real causes of the real estate bubble and the housing over supply were greed, artificially low interest rates, and the corruption at Fannie and Freddie Mac. Your old pal Bubba saw to it that in his administration”
Of course the real estate bubble, like every other evil in the world, was caused by poor people and Democrats. Why did I not realize this? Thank you for helping the scales to fall from my eyes.
Deregulation of financial markets was a bipartisan idea — a dumb one — but now the Repubs are trying to disown it and make it appear that the Democrats favored it and the Repubs were dragged along kicking and screaming. Nice try, but your revisionist history won’t fly here.
If you had read my posting closely, it indicated greed was also at the heart of the calamity. I don’t blame uncreditworthy, poorer people from taking on too much credit when it is pushed upon them. I can see why given your liberal/socialist view of the world, you would draw that conclusion. However, if you put one ounce of thought into the matter you would realize that “uncreditworthy” also applies to the middle class couple who can easily afford a nice home that are then snookered into a much larger mortgage, then losing the house; or the liar loans that underwrote the construction of the McMansions (along with attracting lesser earners as well).
Where I blame the Dems, however, is that it was the Community Redevelopment Act passed under the administration of your political mentor, Jimmy C., along with a democratic house and senate which forced loans to be made at ever lessening credit standards. Making sure that creditworthy minorities had the same access to credit was a very laudible part of this law.
But Bubba lowered lending standards significantly and forced more junk loans to be purchased by Fan and Fred. So yes, it was the Dems at the heart of this one, particularly as it concerned the corruption of Fan and Fred.
So please, stop the revisionist drivel or I’ll have to have you be the guest of the best president this country ever had (Dick Cheney) when he goes on his next hunting trip.
omg, i just read in the paper, they are planing on building 4 new schools in the next 4 years here in Bend, tell me were in the world are they getting this money??? and tell me the way growth or lack there of, how can they fill these schools. they must have more money then what you or i know of. or is there another tax comeing???
“But Bubba lowered lending standards significantly and forced more junk loans to be purchased by Fan and Fred.”
You’re aware, I hope, that loans purchased by Fannie and Freddie were only a small portion of the total mortgage credit bubble.
Could it be that what is really behind the UGB expansion (in addition to tax rape of property owners) is that there’s a power grab between Bend and Redmond. Redmond continues to appear attractive to prospective businesses while Bend’s infrastructure is deteriorating by the day.
Well, then HBM, thank you for agreeing with me re: the Dems. But you are wrong regarding the minor role of Fan and Fred. The loose standards at Fan/Fred conveyed and created a competitive environment that encouraged, even demanded a loosening everywhere.
Another huge culprit in the debacle was allowing investment banks and regular banks to merge operations. Guess who’s admin that occured under? Bubba strikes again. But it still remained the greed and the way we as a country reward talent. The system that over-rewards talent used to create these credit swaps, derivatives, and other exotic pieces of paper should be focused on efforts that truly create wealth (meaning jobs).
But it still remained the greed and the way we as a country reward talent. The system that over-rewards talent used to create these credit swaps, derivatives, and other exotic pieces of paper should be focused on efforts that truly create wealth (meaning jobs).
I had to read this twice to make sure I understood: creating wealth means creating jobs?
Wealth in this country continues to concentrate in the hands of the top 2% at a rate in that is over ten times that of the so-called ‘middle class.’ The wealth is being created through cost-cutting–not job creation. Part of that cost-cutting is the exportation of middle class jobs overseas–in the name of ‘remaining competitive’ and ‘creating wealth.’ Part of that is cost-cutting through layoffs and ‘higher productivity’ by those remaining as they struggle to do the same with less and avoid being the next on the chopping block co the companies remain competitive. Part of that cost-cutting is the elimination of employee medical benefits so the companies remain competitive. Par of that is the elimination of big executive bonuses–oh, wait, if that happens then they won’t be competitive.
As wages for the middle class shrink, wealth for the elite increases. As the job market for the working class gets tighter and tighter, job security for the oligarchs becomes a meaningless concern. Corrupt government–Democrat and Republican feigns concern and the people who vote for them are the focus of their daily contempt or lack of concern.
“Another huge culprit in the debacle was allowing investment banks and regular banks to merge operations. Guess who’s admin that occured under? Bubba strikes again.”
Absolutely. But Republicans were strongly in favor of the deregulation that allowed that and other abuses to happen.
BTW I have never been a big fan of Bubba, although he was light-years better than Bush II.
“But it still remained the greed and the way we as a country reward talent. The system that over-rewards talent used to create these credit swaps, derivatives, and other exotic pieces of paper should be focused on efforts that truly create wealth (meaning jobs).”
Couldn’t agree more.
Efforts to re-regulate, sure:
W tried at Fan and Fred. There was also Sarbannes-Oxley, put in place to guard against the Enrons and World Comms of the world that built their house of cards during the ’90s that ultimately crashed in 2001.
The Republicans had a slim majorities in both houses, not like bam-bam. The senate could not overcome a filibuster so not much gets done (which isn’t all that bad considering the players on both sides of the aisle).
And BTW Cramer, the top 2% earners pay over half the income taxes of this country and are the risk takers who end up employing the middle class. This country could become competitve once again and employ millions more if we had a sensible energy policy, sensible health care (with access to all), and a tax code that rewards domestic risk.
The jobs being saved/created by the pork-stimulus are primarily government jobs and I don’t begrudge anyone who works for the government especially in safety, law enforcement, and education, but the simple fact is that government DOES NOT CREATE WEALTH.
“the simple fact is that government DOES NOT CREATE WEALTH.”
The farmers and ranchers who get water from federal irrigation projects, the industries that get affordable power from federal hydro projects and the companies that ship their goods over the Interstate Highway System might give you an argument — to name a few.
Government might not “create wealth” directly, but it can play — and throughout our history has played — a major part in creating the conditions under which wealth can be created.
“And BTW Cramer, the top 2% earners pay over half the income taxes of this country”
As they should!!
In 2007:
Top one percent had 42.7% of total financial wealth in this country.
The next nineteen percent had 50.3 per cent of the financial wealth.
That means that the to quintile–the top 20%–owned 93% of the total financial wealth.
The remaining 80% owned a meager 7%.
Come on!! Stop quoting the talking heads and look at what has happened.
The wealthy employ the middle class?? What middle class??
The REAL risk takers are the small business people in this country who are not in that upper two percent who labor long hours every day to make payroll and pay their bills and hope there is enough left over to get by.
On the Forbes 2009 list of the 400 wealthiest Americans, only the last ten had not yet accumulated $1 BILLION!! When do you think they spent a sleepless night worried about a mortgage payment? They probably don’t even know what their real estate holdings are.
Most Americans don’t know how concentrated the wealth in this country really is. They don’t understand statistics and how to analyze them. Most haven’t read a book since high school–unless it was written by Beck or Palin or involved some far out conspiracy about how the 9/11 attacks were a Republican plot or how vitamins and arugala are the cure for impotency in aging men.
Give me a break–it is the people who work for these so-called risk takers who are at risk–every day. Their jobs could disapppear tomorrow. Their health could collapse and destroy them economically. They worry and try to come to grips with the fact that their children will probably not do better than they have done.
And the wealthy and the powerful business and political oligarchs spout ‘free market’ and ‘free trade’ bull shit while they sell the future of others for whatever they can get, as long as it adds to their own bottom line.
The poor have more to fear from the wealthy than the other way around. The wealthy control the political system, the economic system, the military system, and the prison system. Through the media they can manipulate and mislead the masses–the current Tea Party is an example. People vent their anger in a meaningless exercise and in the end nothing changes.
Doubt it? Yesterday Palin said that the Tea Party members have to be realistic and choose one of the two major parties to represent their views. Guess which one she was flogging?
“This country could become competitve once again and employ millions more if we had a sensible energy policy, sensible health care (with access to all), and a tax code that rewards domestic risk.” Gee, who is it that opposes these very things? The very same people who have the wealth that could cure these problems IF THEY REALLY WANTED TO!!
But like Michael Steele said the other day–“Trust me, after taxes, a million dollars is not a lot of money,”
Give me a break–if you’re one of those people, no wonder you think the way you do.
“And BTW Cramer, the top 2% earners pay over half the income taxes of this country”
As they should!!
Why exactly? First of all, progressive taxes are unconstitutional. Second, I have never understood the childish jealousy that drives the thinking that people who make top incomes should have a higher portion of that income taken from them. Cramer, If you are unhappy that some people make more money than you, do what they do. Work harder, work longer, get more education, take some chances, change careers. There is no secret club, and luck very rarely determines the winners and losers in a market economy.
Jegglie–
More of the same denial that the dogma requires. The so-called ‘market economy’ you mention has led to the very problems we are experiencing.
You are right about one thing–the club is no secret. They proudly proclaim their success and privilege. And all the while the gap between those at the top and the remaining 80% widens and widens.
‘Work harder, work longer, get more education, take some chances, change careers.’ This is the prescription for what ails us? If it was that simple we would see a massive redistribution of the wealth and the widening of a real–not imaginary–middle class. I would hazard a guess that most, if not all, of the eight million plus who have lost their jobs over the last four years would gladly do just that–but they know the reality.
The market economy is not about providing jobs–it is about maximizing profits, at any cost, including jobs.
Jegglie, I’m not unhappy people make more money than I do. The reality is there are always going to be people doing better than I and not doing as well. What I object to is a system where the rich and powerful have adopted a self-serving, ‘I don’t care what it costs as long as someone else pays the price’ attitude and then have the nerve to cry about how unfair it is that they be asked to pay taxes. If the ‘tax cutters’ had their way they would only pay regressive taxes if any–and still complain about that. Naturally they would still have their defenders crying about how unfair it is for them–after all they ‘provide jobs and take risks.’
I know that you will never accede that there is a legitimate point to be made contrary to your ideology and dogmatic belief. Over the last couple of years that I have read your postings I can usually predict what it is you are going to say about any issue.